The dating world has been turned upside down (yet again). There is no new feature on Match.com, eHarmony, or Christian Mingle. Believe it or not, the culprit this time around is that universal theoretical measuring stick of financial maturity: the credit score.
I came upon this fascinating story in the New York Times (though for a moment I thought I was reading a dating column in Cosmo). Apparently, the new normal involves both sides of the dating equation coughing up credit score information heretofore considered sacrosanct except in economic transactions. It's no longer about getting a job, buying a house, car, cell phone or insurance, nor is it about renting an apartment, or anything else -- and it's not personal. Wait, I guess it is... According to several interviews conducted by the Times, if you don't have the right score, you may well be shown the door.
No doubt most Americans are becoming more concerned about finances with an approaching fiscal cliff -- either a personal one or the one brought to us compliments of those profiles in courage in Washington. For folks lucky to have a job, or the millions of people looking for one, there's growing concern about the financial stability of our personal partnerships.
The truth is, the moment you bring that special guy or gal aboard your love boat, you're no longer the captain of your personal ship. While your credit may be impeccable and spending/saving habits exemplary, unbeknownst to you, the love of your life might be bobbing in a riptide of financial trouble. Barring rescue, he or she can sink your ship of dreams in a matter of months.
So, as you explore all those old prickly issues (who gets which side of the bed, whether to have children, whether to be a partier or a homebody, etc.), you might also, like it or not, be well advised to take into account your credit scores.
Exactly which score are we talking about? There's FICO, Vantage, Experian, and a myriad of others used and created by lenders to help them make a decision. If we are judging another by his or her score, we should at least agree on the score, right? Jokes aside, why get fixated on an algorithm at all? Think of it as less a code and more like a guideline (my thanks to "Pirates of the Caribbean" for that concept). As a credit expert, I suggest it's most important to focus on the report that underlies the score. A credit score is primary a tool to be used to alert you to any material changes in that report as it rises and falls... hopefully more of the former than the latter. It can also be used to match you to financial products you are most likely to qualify for. (You can use this free Credit Report Card to get your free credit scores, as well as an overview of your credit standing in general.)
Now, many consider the credit report and its spawn (there are currently between 80 and 100 scoring models) as an indication of a person's money management skills. I'm not so sure. So much mayhem can happen beyond our knowledge or control: Universal downsizing leading to unfair lay-offs in a lousy economy (sound familiar?), the sudden death of a breadwinner, an unexpected illness leading to gargantuan medical bills that sit on our shoulders like unwanted pigeons on a statue.
Rather than viewing a credit profile as manifestation of one's ability to manage money, I prefer to think of it as a self-awareness tool, and self-awareness is an attractive quality. So how self-aware are you when it comes to your credit? Ask yourself these seven questions:
- Do you check your credit reports for free annually at www.annualcreditreport.com?
- Do you monitor your credit throughout the year using a free service, like the Credit Report Card at Credit.com?
- Are you enrolled in a program offered by credit reporting agencies and resellers to monitor your credit and public records for any sign of identity theft?
- Do you engage in a personal monitoring culture where you review your bank and credit card accounts on a daily basis (Come on now, you look at your email and Facebook pages countless times a day, don't you?) to ensure that all transactions are yours and not those of someone who has conveniently "borrowed" your information?
- Have you enrolled in bank and credit union notification programs that alert you when transactions above a certain threshold are occurring in your accounts?
- When you discover inaccurate or incomplete transactions in your credit reports or improper transactions in your accounts, do you notify the appropriate institution to make changes to eliminate the negative information, or close the compromised accounts?
- When you discover that negative, yet correct, information exists in your credit files, do you develop and implement a plan to minimize the damage? And can you compellingly explain what went wrong, why, and what you are doing to rectify the situation?
It was only matter of time that credit would creep into our social lives, and now it's here. Fight it or embrace it. In all things romantic, I have learned there is little upside to fighting.